Insurance asset managers in the Asia Pacific region are grappling with significant data integration challenges, according to a recent study by Clearwater Analytics. The research, which surveyed 150 executives from Australia, Singapore, and Hong Kong, highlights data integration as the foremost concern, with only 42% of respondents rating their systems as excellent in this area.
The study reveals that asset complexity, involving the structuring and pricing of complex instruments, ranks second in importance but last in performance, with just 23% of executives confident in their systems’ capabilities. This disconnect is exacerbated by the increasing use of third-party asset managers, with 66% of firms expanding their reliance on external managers, thereby multiplying data complexity.
As insurers diversify their investment strategies, private market allocations are expected to surge from 20% to 33% within five years. This shift underscores the need for improved data management systems. Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, emphasised the critical nature of unifying and analysing data across disparate systems, stating, “Firms can no longer afford the performance gaps we’re seeing in foundational capabilities.”
To address these challenges, insurers are adopting strategies such as recruiting from diverse sectors, hiring risk management specialists, and increasing outsourcing. With 92% of respondents acknowledging the increased complexity of data arriving in multiple formats, the demand for integrated platforms that simplify complexity and strengthen risk oversight is clear.
The study indicates that firms closing these capability gaps will gain a competitive edge, especially as 96% anticipate increased mergers and acquisitions activity. Clearwater Analytics’ research highlights the urgent need for APAC insurers to enhance their data integration capabilities to remain competitive in a rapidly evolving market.
